Strong On High Volume: On Track Innovations (OTIV)

Editor's Note: Any reference to TheStreet Ratings and its underlying recommendation does not reflect the opinion of TheStreet, Inc. or any of its contributors including Jim Cramer or Stephanie Link.

Trade-Ideas LLC identified On Track Innovations ( OTIV) as a strong on high relative volume candidate. In addition to specific proprietary factors, Trade-Ideas identified On Track Innovations as such a stock due to the following factors:

  • OTIV has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $6.5 million.
  • OTIV has traded 6.1 million shares today.
  • OTIV is trading at 564.97 times the normal volume for the stock at this time of day.
  • OTIV is trading at a new high 38.25% above yesterday's close.

'Strong on High Relative Volume' stocks are worth watching because major volume moves tend to indicate underlying activity such as M&A events, material stock news, analyst upgrades, insider buying, buying from 'superinvestors,' or that hedge funds and momentum traders are piling into a stock ahead of a catalyst. Regardless of the impetus behind the price and volume action, when a stock moves with strength and volume it can indicate the start of a new trend on which early investors can capitalize. In the event of a well-timed trading opportunity, combining technical indicators with fundamental trends and a disciplined trading methodology should help you take the first steps towards investment success.

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More details on OTIV:

On Track Innovations Ltd. designs, develops, and markets cashless payment solutions. The company operates through three segments: Retail and Mass Transit, Petroleum, and Parking. Currently there is 1 analyst that rates On Track Innovations a buy, no analysts rate it a sell, and none rate it a hold.

The average volume for On Track Innovations has been 285,700 shares per day over the past 30 days. On Track Innovations has a market cap of $105.3 million and is part of the technology sector and telecommunications industry. The stock has a beta of 1.01 and a short float of 1.2% with 0.18 days to cover. Shares are up 1.5% year-to-date as of the close of trading on Tuesday.

STOCKS TO BUY: TheStreet Quant Ratings has identified a handful of stocks that can potentially TRIPLE in the next 12 months. Learn more.

TheStreetRatings.com Analysis:

TheStreet Quant Ratings rates On Track Innovations as a sell. The area that we feel has been the company's primary weakness has been its feeble growth in its earnings per share.

Highlights from the ratings report include:
  • The company's current return on equity greatly increased when compared to its ROE from the same quarter one year prior. This is a signal of significant strength within the corporation. Compared to other companies in the Computers & Peripherals industry and the overall market, ON TRACK INNOVATIONS's return on equity significantly trails that of both the industry average and the S&P 500.
  • The gross profit margin for ON TRACK INNOVATIONS is rather high; currently it is at 50.66%. Despite the high profit margin, it has decreased significantly from the same period last year. Despite the mixed results of the gross profit margin, OTIV's net profit margin of -31.01% significantly underperformed when compared to the industry average.
  • ON TRACK INNOVATIONS has improved earnings per share by 12.5% in the most recent quarter compared to the same quarter a year ago. The company has demonstrated a pattern of positive earnings per share growth over the past two years. However, we anticipate underperformance relative to this pattern in the coming year. During the past fiscal year, ON TRACK INNOVATIONS continued to lose money by earning -$0.21 versus -$0.54 in the prior year. For the next year, the market is expecting a contraction of 33.3% in earnings (-$0.28 versus -$0.21).
  • Despite currently having a low debt-to-equity ratio of 0.51, it is higher than that of the industry average, inferring that management of debt levels may need to be evaluated further. Regardless of the somewhat mixed results with the debt-to-equity ratio, the company's quick ratio of 1.15 is sturdy.
  • The net income growth from the same quarter one year ago has exceeded that of the S&P 500, but is less than that of the Computers & Peripherals industry average. The net income increased by 2.4% when compared to the same quarter one year prior, going from -$2.27 million to -$2.22 million.

STOCKS TO BUY: TheStreet Quant Ratings has identified a handful of stocks that can potentially TRIPLE in the next 12 months. Learn more.

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